Defection Could Be Just What Organized Labor Needs
I'll be rooting from afar this weekend for Andy Stern and all the other dissidents who threaten to break up the house of labor during its showdown convention in Chicago.
One of the best thing that ever happened to the labor movement was the split between the AFL and the CIO in 1935, creating the healthy competition that forced organized labor to retool itself for the industrial era, setting the stage for eventual reunification. The defection of Stern's Service Employees International Union, the AFL-CIO's largest and fastest-growing union, along with the possible departure of the Teamsters and grocery, hotel and needle workers, holds the promise of finally dragging the union movement into the 21st century.
For the past 30 years, organized labor been in a time warp, either oblivious to dramatic changes in the world -- deregulation, globalization, outsourcing and the digital revolution -- or pursuing ill-fated attempts to hold them back.
Even in the golden years of the '50s and '60s, when as many as 1 in 3 private-sector workers was a union member, union strength was concentrated in oligopolistic industries such as steel and autos, or regulated industries such as transportation, communication and power generation, where competition was limited and companies could pass their costs on to consumers.
In government and construction, unions used political muscle to win passage of laws that guaranteed them a healthy share of the market. Mob ties made it easy to organize workers and negotiate generous contracts for Teamsters and longshoremen.
As the union movement grew, millions of Americans were able to enter the middle class. Union contracts evened out the pay between the most valued and productive workers, and those who were less so. And even nonunion employers were forced to offer union wages and benefits to retain valued employees.
What we know now, however, is that those "golden years" were the result of exceptional economic circumstances brought on by the political, financial and technological dominance of the United States following World War II. But as those favorable conditions changed, unions dug in, focusing their energies on preserving pay and benefits and work rules that were unsustainable in a time when markets became more competitive.
At the same time -- and, perhaps, not coincidentally -- investment and growth shifted to those regions (the Sunbelt, Mexico), those industries (tech and services) and those sectors (small and medium-sized business) where unions were weakest.
The results of the unions' backward-looking strategy can be found in statistics showing that less than 10 percent of private-sector workers are union members, with that group heavily weighted toward workers over age 50. They can be found in two-tiered labor contracts that protect older workers to the detriment of younger ones. And they can be found in industries such as steel, autos and airlines, where nonunion companies, paying good wages, are able to thrive while unionized competitors shrink or slide into bankruptcy.
How did it come to pass that the American labor movement is now more about protecting $250,000 pay packages for airline pilots than making sure that janitors and farm workers and chicken processors earn a living wage? Or about ensuring that $25-an-hour auto workers pay nothing toward their gold-plated health insurance plan at a time when 1 in 7 Americans has no insurance at all?
Why is it that, at 7 each morning in cities across America, dozens of young men eager to work, and contractors and homeowners eager to employ them, meet at street corners or parking lots rather than the union hall?
And what should be said about a labor movement that asks Americans to block trade with developing countries that don't honor labor rights -- but sat by as Americans were systematically stripped of their right to form unions at home?
My point here is that the decline of the labor movement is as much the story of missed opportunity as it is one of changing political and economic circumstances. And the blame lies squarely with union leaders more concerned with preserving the past than retaking the moral high ground and grabbing hold of the future.
This isn't a problem only for union members. Just as it's bad for an economy when unions get too strong, it's also bad when they are too weak. It's no coincidence that the decline in union membership mirrors a decline in the share of national income going to workers, along with declines in income equality and social mobility. Having a vibrant, market-savvy union movement is in everyone's interest, whether people choose to join one or not.
Next: What is to be done?